what is a short sale

A short sale is a financial transaction that occurs when an investor sells a security, such as a stock or bond, that they have borrowed, with the expectation that the security's price will fall. The investor then buys back the security at a lower price to return it to the lender, profiting from the difference. In real estate, a short sale refers to the sale of a property for an amount that is less than the outstanding mortgage balance. This typically occurs when the homeowner is in financial distress and needs to sell the property before it is seized in foreclosure. The proceeds of the sale go to the lender, who may forgive the remaining balance or pursue a deficiency judgment against the former homeowner